20 Steps to Warehouse Productivity Improvement. Martin Bailey Industrial Logistic systems

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1 20 Steps to Warehouse Productivity Improvement Martin Bailey Industrial Logistic systems

2 How to Create the Most Efficient Warehouse?

3 What Are We looking For? Cost Effective Great Service High Accuracy Sustainable

4 This Presentation is All about Productivity

5 About Being Lean (but not too lean) Reduce Waste Reduce Inventory Reduce Lead Times Returns Reduce Defects Continuous improvement! And getting the Best Out of Your DC

6 We will also examine: Continuous Improvement vs Radical Change

7 And - Your Warehouse in The Future

8 And Creating Lots Visibility

9 Q: Do Decent Jobs Come From Productivity?

10

11 1. Understand how your broad business objectives integrate with the supply chain & the warehouse function Business Strategy Supply Chain Strategy & Tactics Warehouse Strategy & Tactics

12 Warehouse Needs to be a Strong Link in the Chain

13 2. Understand how your customers' business objectives integrate with the supply chain & the warehouse function

14 Customer Wants Needs Service Levels What are customer s needs / expectations? What level of service does your customer require? How does he wants to be supplied? What type of infrastructure does he have in place? How does his business tie in with your supply chain?

15 Understand your customer diversity

16 Example: Pareto Analysis of Customer Demand Example Pareto developed the principle by observing that 20% of the pea pods in his garden contained 80% of the peas

17 0% 2% 4% 5% 7% 9% 11% 13% 15% 16% 18% 20% 22% 24% 25% 27% 29% 31% 33% 35% 36% 38% 40% 42% 44% 45% 47% 49% 51% 53% 55% 56% 58% 60% 62% 64% 65% 67% 69% 71% 73% 75% 76% 78% 80% 82% 84% 85% 87% 89% 91% 93% 95% 96% 98% Percentage of sales Often Not 80 20! See Example Below 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Percentage of range Here 6.6% of range makes up 80% of sales. Is this created by need to meet all customers needs at a very high service level? Do you need to treat this 6.5% differently! Do you need to get rid of redundant stock! What causes this imbalance? How would this look if we dropped service levels?

18 Your Response to Customer Needs Affects Productivity

19 And Avoiding Grumpy Clients

20 3. Understand customers inbound constraints Example customer wants it on: Rolltainer Standard pallet Euro pallet Crate Box

21 What Customer Does Not Want Packaged so he spends many hours checking unravelling inbound supply

22 Maybe not good for the warehouse or transport but ideal for end user!

23 Integrate with Outbound & Inbound Transport Need to Know: Type and size of inbound & outbound delivery vehicles Delivery schedules Traffic conditions Total network

24 Traffic Patterns Delivery Hours etc

25 Side Load Curtain Side Multi Deck

26 Rear Load / Unload Transport Integration

27 Rear & Side Load

28 Tail Lift

29 And getting Longer (EuroCombi)

30 Docking Containers May Have a Deck Height of 1200mm to 1800mm Typical rig with low deck height

31 US, Europe, Far East Standard Truck Deck Heights

32 Future

33 Electric Delivery Truck

34 Maybe Something Different

35 Different Transport?

36 4. Understand your suppliers' outbound constraints

37

38

39

40 5. Simplify receiving process Advanced Shipment Notices (ASN) Appointments Standardised paperwork Standardise labelling Scanning etc

41

42 Chaos Never a Good Idea

43 6. Eliminate non-standard processes Pallets Trucks Lift trucks Coding Stacking Processes etc

44 Sometimes Non Standard OK

45 Examples:

46 7. Optimise put away ABC analysis & sort accordingly By range By physical attributes FIFO Bulk vs break bulk Pick face priority Accuracy driven Equipment driven

47

48 Slotting - Example

49

50 How it Should Look

51 Only hire people with Obsessive Compulsive Disorder

52 8. Integrate let-downs With picking With demand With dual cycles With labour With resources

53 Pick Face Always full Priority Ground much faster Leave space

54 Ground Best Over 250 cases per hour!

55 2 nd level slower

56 Higher = slower

57 Higher + Large = Even slower

58 Goods to Man

59 9. Optimise picking Customer needs On time in full Timing (not too early not too late) Right resources Right technology Right accuracy Right ID Right labour Right technology etc Picking drives service!!!!!!!!

60 Drives Most Processes

61 PICKING CAPACITIES & TECHNOLOGY - LARGE CASE TYPE OPERATIONS Category of Goods TYPICAL PICKING CAPACITY PER PERSON PER HOUR ACCURACY SECONDARY SORT NEEDED TYPICAL MAXIMUM FACILITY CAPACITY CASES/SHIFT A Pick to belt - PTL High Yes high A Pick to belt High Yes high A,B,C Label - to pick truck Medium No medium - high A,B Voice - to pick truck Medium No medium - high A,B,C RF pick to pick truck High No medium A,B,C Paper - no WMS Medium No low SELECTIVE RACK DEEP LANE STORAGE

62

63 Technology Especially Important

64 10. Minimise (Optimise) Staging Less is often better Integrated with picking Integrated with transport Integrated with resources Too much vs too little

65 Extend Staging?

66 Many Benefits To Reconfiguring

67 Direct Loading?

68 Direct Loading

69 Stage

70

71 11. Integrate orders with transport Right truck Right unit load Right checking Right security Right invoice Customer interface

72

73

74 12. Load optimally with route Plan Route Optimise size Optimise unit load Optimise drops Optimise schedule

75 Some Balance Important

76 Load to be unloaded

77 Linked to staging Plan Route Optimise size Optimise unit load Optimise drops Optimise schedule

78

79 Too Little / Too Much

80

81 13. Track to POD From leaves warehouse to customer POD Customer happy POD return Pick up returns

82

83 Sometimes Difficult

84 How?

85 14. Measure Costs On time in full Inputs Outputs Labour Damages Throughputs Returns

86 You Cant Manage What You Cant Measure

87 Core Measurements Costs Effect on Supply Chain OTIF Stocking Efficiency Operational Efficiency

88 15. Set targets for improvement

89 16. Understand what physical technology can do for operations

90 Buildings

91 Buildings & Rack

92 Does technology override all?

93

94 1000 pick/hr vs 50 pick per hour!

95 Slow but flexible

96 When to Automate Repetitive tasks needed High accuracy needed High throughput required High labour costs Rapid response needed Space constraints

97 AGV + Robot

98 Needs special pallets

99 Kiva - Amazon

100 Order Picking Using Robotics

101 Fully Integrated

102 Mini Load AS/RS

103 100% check

104 A Frame Small rectangular product

105 Monorails

106 Sainsbury Automated DC s

107 Example: Sainsbury Distribution Centre Failure Company s cost-per-case was significantly higher than its nearest rivals like Tesco. Sainsbury s had been managing distribution in the same way for more than 40 years Sainsbury s depots were at the end of their useful life. One store could be receiving goods from five or six different depots in any day. Solution big bang automation 4 DC s new IT. Spent 3 billion on a sophisticated supply chain! 4 fully automated warehouses Did not work! 3000 extra staff had to be hired! Wrote off 260m on IT In 2005, Sainsbury had to write off 526 million of balance sheet 107

108

109 Heathrow Terminal 5 IT Failure Cost 4.3b 400,000 man-hours of software engineering Same thing happened at Denver! IT system not communicating with conveyor system! Baggage went down reject chute! 109

110 EEEish 110

111 Heathrow Terminal 5

112 Automation can go wrong If Treated as an Island!!!!!

113 Embracing Automation The Future? 113

114 Well Maybe There Are Some Things Not Worth Automating

115 17. Understand what IT technology can do for operations

116 Good WMS Core to Productivity

117 Track & Trace

118 Hands Free

119 Voice

120 Significant increase in productivity

121 Hybrid?

122 The Future?

123 I LOVE my robot It works hard 24 hours a day, never makes mistakes, doesn't steal, and does not need pay

124 18. Continuous SWOT analysis

125 Example: Electricity / Water / Labour Threats

126

127 19. Check what world class operations do differently

128

129 Gartner Top Companies In Supply Chain

130 In Logistics: In Masters Degree Programmes in SC: 1. WU (Vienna University of Economics and Business) Master of Science in Supply Chain Management 2. Bordeaux Management School - KEDGE Business School ISLI - MS Global Supply Chain Management 3. Erasmus University Rotterdam MSc in Supply Chain Management 4. Copenhagen Business School (CBS) MSc in Economics & Business Administration - Supply Chain Management

131 Who is best in business? What do they do?

132 Not Always

133 What is World Class Easy to Pick Up Compare Strategic Compare Tactical Compare Operational Level Benchmark

134 20. Benchmark

135 Benchmarking is the process of comparing one's business processes and performance metrics to industry bests or best practices from other companies.

136 So How Do You Benchmark Against The Rest of The World?

137 How Fast / efficient are the best of the best

138 Example: % Delivered In Full On Time In Full DIFOT On Time Accurate invoice

139

140

141 Team effort

142 Perhaps as long as team going somewhere

143 Individual Effort?

144 Careful get it right

145 Staff suited to Job

146 Happiest when working!

147 Best Companies to work for make lots profit! Unilever South Africa Accenture SA EY South Africa Old Mutual Bain & company Twitter LinkedIn Eastman Chemical company efkk45ffdhl/no-1-bain-company/ o.za/leadership/1712/top-10- Employers-in-South-Africa,-2015

148 People Make The Difference Look After Them

149 Remove Constraints A Different Way of Looking At It

150 * Neat * Tidy * Organised * Structured * Orderly * Precise * Well-kept * Fastidious * Systematic * Uncluttered * Methodical * Regulated *Clean Obsessive Compulsive Disorder

151

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